Lionhead cuts 50 staff, scales back project portfolio

British developer Lionhead has confirmed industry rumours of layoffs at its studios in Surrey, with the company's headcount being cut from 250 to 200 in the wake of poor performance of recent PC titles.

The cutbacks are also believed to spell the end of some of the company's current projects, with studio founder Peter Molyneux telling staff on Friday that only two projects, both for next-generation platforms, will be staying on the roster.

One of those titles, believed to be a sequel to much-delayed but well-received Xbox title Fable, is described as having been in development for around twelve months, while the other unknown title has been underway for significantly less time.

It would seem from this that the console ports of The Movies, Lionhead's last PC title, have now been canned by the developer - having already been dropped by publisher Activision last month following weak sales of the PC version of the title.

The future of the Black and White franchise also seems uncertain after Black and White 2 also failed to impress at retail, with publisher EA giving no indication either way regarding any intention to sign another title in the series.

The situation at Lionhead has been the subject of much speculation in recent weeks, with development industry insiders suggesting that Molyneux had renewed attempts to sell the studio to a publisher in the wake of the poor performance of the two PC titles.

Microsoft, which published Fable, was cited as one interested party - but the firm is unlikely to want to pay much for the studio, since the company's games division is still fighting to claw back its investment in another British firm, Rare, which was acquired in a $375 million deal back in 2002.